The government should consider developing a green bank and green bonds (capitalised through the National Clean Energy Fund, issued by the central or state governments) to leverage more private investment in renewable energy, according to a report on ‘Renewable energy jobs and finance’ published by the Natural Resources Defense Council (NRDC) and the Council on Energy, Environment and Water (CEEW). The report, which assess domestic and international opportunities to fund clean energy in India, was released by Suresh Prabhu, head of the Advisory Group for Integrated Development of Power, Coal and Renewable Energy recently.
“Energy access and clean energy development is a national priority. Solar and wind energy provides a tremendous opportunity to provide light to Indian homes and jobs to local communities,” said Prabhu.
According to NRDC-CEEW analysis, India’s solar and wind programs have catalysed rapid growth providing much needed energy access, creating employment opportunities for India’s workforce. The analysis also finds that deployment of innovative financing solutions is needed in order to scale India’s renewable energy markets and widespread job creation.
The Indian solar industry has been maturing at a rapid pace, growing more than a hundredfold in four years to reach over 2.6 gigawatts (GW) of installed capacity in 2014. India is the world’s fifth largest wind energy producer, with over 20 GW of installed capacity.
According to NRDC-CEEW report, Indian government should boost financing for renewable energy projects by improving access to low cost finance, using diverse financial mechanisms such as infrastructure debt funds, priority sector lending and tax incentives (such as accelerated depreciation and tradable tax certificates). It recommends implementation of generation based incentives and penalties in combination with any form of viability gap or tax related capital subsidies.
“Clean energy development is vital to economic growth in India. While the National Solar Mission and the proposed National Wind Mission still face significant hurdles, India has already made important strides to attract new domestic and international players into the market and generate local jobs,” said Anjali Jaiswal, Director of Natural Resources Defense Council’s India Initiative.
Dr Arunabha Ghosh, CEO of CEEW, added, “As nations race to become clean energy leaders, governments around the world will be closely following the progress of India’s renewable energy revolution. It is essential that the Indian government adapts its strategy to boost confidence in projects and spur investment from a variety of funding sources and financial institutions.”